The new fixed rate savings bonds from Coventry Building Society pay a decent rate and will support the Royal British Legion charity.
Coventry Building Society has re-launched its popular Poppy Bond.
Since 2008 the building society has issued this special fixed rate bond to help raise money for the Royal British Legion’s Poppy Appeal.
So far £8.6 million has been raised by the limited edition Poppy Bonds, which has helped fund crisis grants, family breaks, benefits and money advice for members of the Armed Forces, veterans and their families.
2013 Poppy Bonds
This year there are two limited edition, fixed rate savings bonds to choose from.
The Poppy Bond (26) will pay 2.60% until 30th April 2017 and a sum equal to 0.1% of the total amount invested will be donated to the Poppy Appeal.
The Poppy Bond (27) will pay a smaller 2.50% until the same date, but a sum equal to 0.45% of the total amount invested will be donated to the Poppy Appeal.
You can open either account with just £1 and deposit up to a maximum of £250,000. Interest is paid monthly or annually. The accounts can be opened online, over the phone or in a branch.
The amount donated to the Poppy Appeal will be calculated at the end of December, presumably when the bonds are withdrawn from sale.
How the Poppy Bonds compare
So how do the Poppy Bonds compare to the rest of the market?
Below is a table showing the top three-year fixed rate savings bonds available at the moment.
|
Savings bond |
Interest rate (AER) |
Minimum deposit |
Fixed term |
Access |
|
Shawbrook Bank Three-Year Fixed Rate Bond Issue 12 |
2.65% |
£5,000 |
Three years |
Online , post |
|
Secure Trust Fixed Rate Bond Three-Year Term |
2.61% |
£1,000 |
Three years |
Phone, post |
|
2.60%* |
£1 |
Until 30/04/2017 |
Online, post, phone |
|
|
2.56% |
£1,000 |
Three years |
Online |
|
|
Saga Three-Year Fixed Rate Savings** |
2.55% |
£1 |
Three years |
Post |
|
Close Brothers Select Gold Three-Year Fixed Term Fixed Rate |
2.55% |
£10,000 |
Three years |
Online, post |
|
Investec Three-Year Fixed Term Deposit |
2.55% |
£25,000 |
Three years |
Online, phone |
|
2.50%*** |
£1 |
Until 30/04/2017 |
Online, post, phone |
|
|
Skipton Three-Year E-Bond |
2.50% |
£500 |
Three years |
Online |
|
United Bank UK Three-Year Fixed Term Deposit |
2.50% |
£2,000 |
Three years |
Online, branch, post |
|
Bank of London and the Middle East Sharia-Compliant Premier Deposit Account**** |
2.50% |
£25,000 |
Three years |
Online |
* 0.10% of total balances invested in bond donated to Poppy Appeal
** Over 50s account
*** 0.45% of total balances invested in bond donated to Poppy Appeal
****Anticipated profit rate
As you can see neither of the Poppy Bonds are market leading when it comes to three-year fixed rate savings bonds. Poppy Bond (26) sits in third place while Poppy Bond (27) takes up eighth in the best buy table.
The leading deal in this sector comes from Shawbrook Bank, which pays 2.65% on its three-year fixed rate bond, followed by Secure Trust which pays 2.61%. However, you will need a minimum deposit of £5,000 with Shawbrook or £1,000 for a Secure Trust account.
The Poppy Bond (26) only requires £1 to open and offers a longer fixed rate of three and a half years, which along with its charitable pledge might be a better offer for some.
Where to find a better rate
Overall savings returns are pretty poor at the moment.
[SPOTLIGHT]Rates have experienced a decline driven by the Funding for Lending Scheme and the record low base rate.
Last year for example the Coventry Poppy Bond took the shape of a two-year fixed rate deal which paid 3.25%. Now the new bonds are fixed for over three years and only pay up to 2.60%.
Investing in a long-term fixed rate bond of between four and five years can get you a better rate. The Vanquis Bank Four-Year High Yield Bond pays the most when it comes to four-year fixed rate bonds with a return of 2.86%. For five-year bonds the competition is fierce. Secure Trust pays the top rate of 3.11% while the Vanquis Bank Five-Year High Yield Bond follows close behind with a rate of 3.10%.
If you don't want to lock up your cash, some current accounts are offering decent rates of in-credit interest at the moment.
The Nationwide FlexDirect Account pays 5% on balances up to £2,500. While the Santander 123 Current Account pays 3% on balances between £3,000 and £20,000.
More on savings:
The best regular savings accounts
The best instant-access savings rates
The best fixed-rate savings accounts
How I traced my old Abbey passbook savings account
Why some current accounts are better than savings accounts